Equipment Manufacturer
46%
Cost savings
90
Days saved in lead time
22%
COGS reduction
Headquartered in Massachusetts, the company designs, manufactures, and distributes specialty instrumentation for the life sciences market with 2 manufacturing facilities.
The Customer
The company’s COGS accounted for about 72% of their total expenses, which largely consisted of various galvanized steel coils. For the last 13 years, they have relied on a single vendor to supply this raw material. Over the years, this vendor has implemented numerous price increases and demonstrated long lead times in excess of 5 months.
The Challenge
Dirakis™ partnered with the company to conduct a cost analysis, identifying the most expensive galvanized steel coils as the key drivers of their high COGS. Together, we set a target price reduction of 20% and negotiated favorable terms, ultimately becoming their new preferred supplier. Through strategic AI-driven sourcing and our competitive pricing structure, we delivered this material at a 46% lower cost than their previous vendor. This shift resulted in an overall COGS reduction of 22% and shortened lead times by three months, enabling the company to operate more efficiently and improve profitability with significantly better cash flow. The annual dollar-value impact to the bottom line was approximately $360,000.
The Solution
